Thursday, January 31, 2008

NEW YORK (CNNMoney.com) -- Faced with growing risks of recession, the Federal Reserve made its second deep interest-rate cut in a week and slashed a key short-term rate by a half-percentage point Wednesday.U.S. stocks, which had been slightly lower ahead of the announcement, surged on news of the rate cut but ended lower after a volatile final two hours of trading.The federal funds rate - an overnight bank lending rate that affects how much interest consumers pay on credit cards, home equity lines of credit and auto loans - was cut to 3.0% from 3.5%. The rate had stood at 5.25% only four months ago.The discount rate, which is what banks pay to borrow directly from the Fed, was also cut by a half-point to 3.5% on Wednesday. The cut was made at the request of nine of the nation's 12 Federal Reserve district bank presidents.The Fed slashed both rates by three-quarters of a percentage point in an emergency move on Jan. 22.Read the Fed statementOne member of the Federal Open Market Committee, Dallas Fed President Richard Fisher, voted against Wednesday's cut in the fed funds rate. He argued that rates should have been left unchanged after the series of rate cuts by the central bank in recent months. Fisher is generally seen as a so-called inflation hawk who is greatly concerned with maintaining price stability.The Fed, in its statement explaining the cut, acknowledged that the risk of inflation needs to be monitored, but said that the majority of its members believed that price pressures will moderate in coming quarters.The rate cuts were necessary because problems in the credit markets were putting a squeeze on both consumers and businesses, the Fed said. It added that it sees growing weakness in both the job market and the battered housing market."Today's policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity," according to the statement. "However, downside risks to growth remain."The Fed also appeared to hint that it will keep cutting rates if the economy shows more signs of decline."The committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks," the statement said.Keith Hembre, chief economist for First American Funds, said the statement suggested a greater likelihood of more cuts than he was expecting.Economy much weaker than expected"I thought that they would probably include some language to temper expectations of any additional cuts in the near term," he said. "That statement makes it sounds like they're still in motion."Wall Street is now betting on more rate cuts in the next few months. According to federal funds futures trading on the Chicago Board of Trade, investors are pricing in a 100 percent chance of at least another quarter point cut by May and a 70 percent chance of rates being a half-point lower than there were after this move. The Fed is scheduled to meet next on March 18 and April 29-30, but has no meetings scheduled for May.But one economist said that further rate cuts could be justified, and that it makes sense for the Fed to build on its emergency cut of a week ago, even if some see it as caving to market pressure."They could have gotten away with a quarter, but that risked undoing every thing they did a week earlier. They are now ahead of the curve," said Mark Vitner, senior economist with Wachovia. "Vitner said he's not surprised that the fed funds futures indicate that investors expect more cuts. "You give them an inch, and they want a mile," he said. But he's also expecting a quarter point cut at each of the next two meetings."Given where the Fed says the risks lie, you have to ask yourself, 'Are financials markets going be all that less stressed by March?'" he said. "I think the answer to that is, 'Probably not.'"But economists who are concerned about inflation criticized the Fed move, and its apparent lack of attention to price pressures."Higher prices are coming, even if the economy slows to a crawl," said Rich Yamarone, director of economic research at Argus Research. "We've seen price increases in company announcements, in our grocery bills and in the economic data. The Fed is telling you they're going to watch it because that's in their mandate. But I think they'll turn a blind eye to that."The rate cuts came on a day the government reported that economic growth slowed significantly in the last three months of 2007, matching its weakest performance of the past five years. It also comes as Congress rushes to pass a $150 billion economic stimulus package to spur spending by both consumers and businesses.

Thursday, January 24, 2008

Washington Sets $150 Billion Plan To Jolt EconomyPackage Includes Boost For Big Mortgages, Rebates for TaxpayersBy SARAH LUECK, TIMOTHY AEPPEL and MICHAEL M. PHILLIPSJanuary 25, 2008WASHINGTON -- Congress and the White House hammered out an economic stimulus package that would put $150 billion into the hands of consumers and businesses while seeking to revive the market for large mortgages.It was a rare display of compromise and speed in a city known recently for partisan gridlock. Both parties were responding to middle-class economic fears, as election-year nerves are frayed by a seesawing stock market, a wave of home foreclosures and a credit crunch. "I can't say that I'm totally pleased with the package, but I do know that it will help stimulate the economy," said House Speaker Nancy Pelosi.House Speaker Nancy Pelosi, center, Treasury Secretary Henry Paulson, left, and House Minority Leader John Boehner discuss the economic stimulus plan.Economists said the measures, coming as the risk of a downturn rises, could boost growth this year by between three-quarters of a percentage point and a full point.One important provision temporarily raises the dollar limit on mortgages that can be bought or guaranteed by government-sponsored mortgage giants Fannie Mae and Freddie Mac. The current limit of $417,000 would rise above $600,000 and perhaps as high as $730,000 in the most expensive areas, congressional leaders said.The centerpiece of the package is $100 billion in tax credits for an estimated 117 million families this spring. Most individuals who pay income taxes would get $600; working couples would receive $1,200. Workers who make at least $3,000 but don't pay income taxes would get checks of $300 to $600. People in both groups would get $300 credits for each of their children.Top Democrats said they intend to send a bill to President Bush by Feb. 15. If that happens, rebate checks or electronic transfers would probably arrive between May and July.Businesses would be able to deduct an additional 50% of the cost of certain investments in 2008. In addition, small businesses would be able to write off more expenses from their taxes: $250,000, up from $125,000.Richard Seaman, the chief executive of Seaman Corp., a maker of industrial textiles used in everything from roofing to military tents, had planned to put off $2 million in equipment purchases for as long as two years."But with this tax break, we'll probably move it forward to get within the time boundaries," he said. Mr. Seaman had lunch yesterday with four major customers and asked them about the prospect of tax breaks. "There was quite a bit of enthusiasm," he said.Phased OutThe checks would be gradually phased out for wealthier taxpayers. Couples with income of more than $174,000 would get nothing, unless they have children.President Bush announces his support of an economic stimulus package that includes refunds for tax filers and a measure to help the mortgage market. Video courtesy of Fox News.The Dow Jones Industrial Average climbed 108.44 points, or 0.9%, to 12378.61 after a late round of buying stirred by optimism about the stimulus plan.In crafting the deal, leaders of both parties were forced to give ground. Democrats wanted new spending on food stamps and unemployment benefits, but didn't get it. Republicans held their noses and agreed to $28 billion in credits for 35 million families who don't pay income taxes. They also gave in to the cap that stops wealthier people from getting checks. Bush administration officials had earlier floated a plan to give $800 rebates to all income-tax payers."Philosophically, as Republicans, all people who pay taxes ought to get tax relief," said House Minority Leader John Boehner of Ohio after the deal came together.Ms. Pelosi said that despite her misgivings, the plan "is about putting money in the hands of America's working families." Mr. Boehner added, "We wanted to get money back to middle-class families as efficiently as possible."The deal's speed, negotiated during a week of meetings between House leaders and Treasury Secretary Henry Paulson, is testimony to that concern. In the rush, some details got muddled. Ms. Pelosi's office at one point yesterday issued a fact sheet that gave the new Fannie and Freddie limit as $625,500, while other congressional leaders put the figure at around $730,000.The House plans to vote on the bill in early February, bypassing the usual committees.Weighing InSenators, who weren't heavily involved in the talks, now get a chance to weigh in. The Senate's tax panel chairman, Democrat Max Baucus of Montana, said he would take up a stimulus bill next week. Some Democratic senators are hoping to modify the agreement by adding unemployment benefits, food stamps and road repair. And the nation's governors are still calling for $12 billion in aid for Medicaid and other programs.Democratic leaders said the debate might be freewheeling but they would aim for a speedy conclusion. "We will move quickly...and we should not get bogged down in a lot of details," said Mr. Baucus.The loudest complaints about the plan came largely from the left. "This is no time for Congress to throw in the towel," said AFL-CIO President John Sweeney in a written statement calling for the Senate to put unemployment benefits and food stamps back into the package. He said Congress should "get money into the hands of those who will spend it quickest and need it most."INSIDE THE DEAL

-Tax rebates: Checks of at least $300 for almost everyone earning a paycheck, including low-income earners who make too little to pay income taxes, so long as they earned at least $3,000 in 2007. Families with children would receive an additional $300 per child, while those paying income taxes could receive higher rebates.-Business tax write-offs: Spurring business investments with so-called bonus depreciation and more generous expensing rules.-Housing rescue: Raising the limit on Federal Housing Administration loans and boosting the cap on loans that Fannie Mae and Freddie Mac.The Internal Revenue Service expects to be able to begin mailing out checks and making electronic transfers by May, said Mr. Paulson. He told reporters the "lion's share" of payments would be completed within the following 10 weeks.Doug Elmendorf, an economist at the Brookings Institution, estimated the package would add roughly 0.7 percentage points to growth in gross domestic product for 2008, with the effects concentrated in the second half of the year. In addition, Mr. Elmendorf said, business and consumer confidence should get a boost from the assurance that help is on the way.However, he warned, "one should not expect that everything will be rosy because this deal has been worked out."A small but notable contingent of economists, largely on the right, questioned whether the stimulus was needed at all. Harvard economist N. Gregory Mankiw, a former Bush adviser, argued that the rescue package is overkill at a time when unemployment measures 5%, a low rate historically."Monetary policy is the first line of defense against recession, and I think it's doing its job right," Mr. Mankiw said, referring to the Federal Reserve's series of interest-rate cuts since last August. "I'm not convinced yet that fiscal policy is necessary at this point."Senate Budget Committee Democrats said Wednesday that a $140 billion stimulus package would add about $100 billion to the deficit in fiscal year 2008, which began in October, bringing the total deficit for the year to about $350 billion.Harvard economist Martin Feldstein, a former adviser to President Reagan, told the Senate Finance Committee it would be better to make a stimulus package contingent on signs of impending recession, such as repeated increases in unemployment. But he said the economy's deterioration is "enough to make an immediate fiscal stimulus better than doing nothing at this time."Only Go So FarSome company chiefs warned a stimulus could only go so far in propping up the economy. "Our particular business is tied to the auto industry, and if cars aren't selling [the stimulus is] probably not going to get us to go out and buy a new machine," said Kim W. Beck, chief executive of Automatic Feed Co., a Napoleon, Ohio, maker of presses used to stamp out car bumpers and other metal pieces.Mr. Beck said he still has no plans to buy any machines this year. If he was on the fence about a purchase, "then you might be influenced," he said.Dean Garritson shares that conservative view. As president of Green River Cabins -- a Campobello, S.C., maker of log homes used mostly as vacation getaways -- he is planning to buy some equipment this year, including a new overhead crane for his factory. But a much bigger expansion plan is staying on the shelf. His business is strong, he said, but mainly because three regional competitors have gone out of business in the wake of the housing bust."I would never go off and do dumb stuff like dramatically increase capacity of my plant when I don't have the orders," he said.--John D. McKinnon contributed to this article.

Thursday, January 17, 2008

There are several requirements common to all levels of membership and affiliation. Everyone who joins the organization must meet the NAPFA definition of Fee-Only. In short, this means that you cannot earn any transaction-based compensation from financial planning related activities.Commissions of any type from current business and trails or renewal from past business are a couple of examples of prohibited compensation. Additionally, you can't be affiliated with a commission-earning firm like a broker/dealer or insurance agency. Everyone who is currently employed in the financial services profession will be asked to submit Part II and Schedule F of your current Form ADV (or equivalent).

Friday, January 11, 2008

Yesterday morning, Ernest Wilford went to the Jags facility at 5am to work out like he does every day. He got done about 6:30 and went to a little breakfast place near the stadium, just like he does every morning. The couple who owned the place weren’t there so he asked the young cook where they were. He told them that they’d been a car wreck the night before and were in the hospital. Ernest skipped breakfast and went to the hospital. When he got there, the couple were in stable condition, but being held for more tests. Their 3 kids had been there with them all night. Their Aunt had picked them up the night before and brought them to the hospital but had just left to go home to get dressed for work. Ernest asked the parents if he could take the kid with them. He took them to the Jags facility and let them shower up in the locker room after a long night. He went to the team manager and found some clothes for them to throw on. They followed him to the film room and sat in the back while they broke down tape. They then followed him to practice and sat on the sidelines during practice. After a full at the facility, Ernest went to my Dad’s store and bought the kids and parents jerseys. Of course, when asked what player they wanted, Ernest interrupted the kids and told them they had better answer that question correctly lol. The kids then went home with Ernest and had dinner with him and his wife. After dinner, he got a call saying the parents were being released so he took the kids back to the hospital.